• Tyler Kirsch

Who's at Fault in Our Stars: A Primer on liability for Space Investments

Aggiornato il: 16 nov 2020

Tyler Kirsch investigates a field obscures as the deep space, between private and international law, accounting both international treaties and private contracts at the base of any space mission.

Can we Account Space Law as a field of Investments Law?

Space is often quipped to be the final frontier.

For the last 60 years, humanity has been piercing the atmosphere to expand its grasp and understanding of space. For the majority of this time the endeavor of space exploration, manned or unmanned, have been almost solely in the purview of States: National Aeronautics and Space Administration (NASA), Roscosmos or other similar government agencies have been the ones planning missions and paying to make sure those missions happened. This isn’t ignoring that private contracts have been essential to the programs since the early ‘60s, but merely that it was the governments’ various pushes towards space endeavors that were the driving force to the creation of a market that didn’t exist more than 60 years ago.

In the decades that followed the first pushes by mankind away from the pull of Earth, the Cold War was the political shadow that lain under most actions on the international stage. It was also during this time that the United Nations created the treaties that are still active today regarding space. It would be to everyone’s benefit, if possible, to reiterate and refocus the private and public responsibility under the current regimes to open and secure investments in the next age of exploration. As for the need to write on this subject, this is two-fold. First, when the field of space law is brought up to individuals not aware of it, the general reaction has been that “it sounds interesting,” but there isn’t anything to seek out in that field. This leads to a more important point: the very real view that multiple entities have taken on space law as being an endeavor worth doing. The United States Geological Survey has started to work on mapping the near-Earth bodies for their mineral worth for future exploration and mining.4 According to Goldman Sachs, “The next trillion-dollar industry will be in the mining sector, and the world’s first trillionaire will make his or her fortune by mining in outer space.”5 This is not only a task that should be the aim of the State’s and the biggest companies, but the individual should also look into what the future may hold in this industry. The second need to write on this subject is because there is so little known about the subject that it isn’t just that people find it unreasonable to look into, it is that the field is so untested as to be tenable only through luck. Every year, various organizations, private and public, launch space objects while the political and legal framework is still murky. While organizations continue to add to the number of objects in orbit, “it is estimated that there are at least 8000 trackable objects in near-Earth orbits. Those objects are baseball size or larger . . . Of those 8000 objects about 400-500 are operational spacecraft. The others are space junk!”6 When space objects collide or when debris falls and damages property or people, who is liable? Do the rules change when the damage occurs across a border? We can let these questions arise until we can no longer put them off,7 or we can approach them now so that when the question arises the answer is already prepared. II. History of International Space Law By the end of 1967, the Treaty on Principles Governing the Activities of States in the Exploration and Use of Outer Space, including the Moon and Other Celestial Bodies, (The Outer Space Treaty) was signed.8 In comments to the Legal Sub-Committee of the United Nations Committee on the Peaceful Uses of Outer Space, the Chairman noted, . . . in the three years since the adoption of the Declaration of Legal Principles Governing the Activities of States in the Exploration and Use of Outer Space (in 1962). . . little progress had been made towards ensuring that outer space was used for man’s advancement and not for his destruction. The choice to be made by man was clear, and in that choice the law-maker and the lawyer could not remain neutral. Within six months, he was able to present The Outer Space Treaty which was quickly adopted by the General Assembly.9 Over twenty-seven articles The Outer Space Treaty uses various terms of art without further explanation: “State Parties to the Treaty shall regard astronauts as envoys of mankind. . .;”10 “outer space;”11 “procures the launching of an object” 12 (emphasis mine). For reference later, Articles VI and VII will be relevant below. The next treaty, the Agreement on the Rescue of Astronauts, the Return of Astronauts and the Return of Objects Launched into Outer Space (The Rescue Agreement) clarifies the obligations of members to the envoys of mankind without referencing the term.13 Broadly, this treaty charges all members to provide aid if they are available to do so, to the greatest extent they can, and to promptly return all the envoys and equipment to the “launching authority” (emphasis mine).14 This was the first treaty to use the term “launching authority,” and states it, . . . shall refer to the State responsible for launching, or, where an intergovernmental organization is responsible for launching, that organization, provided that organization declares its acceptance of the rights and obligations provided for in this agreement and a majority of the States members of that organization are Contracting Parties to this Agreement and to (The Outer Space Treaty). In 1972, the Convention on International Liability for Damage Caused by Space Objects (The Liability Convention) was signed and will be discussed in-depth in the next section.15 The fourth treaty, the Convention on Registration of Objects Launched into Outer Space (The Registration Convention) entered into force in 1972.16 This requires a “launching State” to maintain a registry of their objects for their records, as well as notifying the Secretary-General of the United Nations.17 Some terms become more defined in this convention: “launching State,” is a State which launches or procures the launching a space object or a State from whose territory or facility a space object is launched, and “space object,” includes parts of a space object as well as its launch vehicle and parts thereof.1819 Lastly, the Agreement Governing the Activities of States on the Moon and Other Celestial Bodies (The Moon Treaty) from 1979.20 The Moon Treaty, with France and India being the largest signatories, and without having the signatures of the United States, the Russian Federation, or the People’s Republic of China, is considered to be a failure from the international law perspective.21 The Moon Treaty was an attempt by non-major players in space exploration to cement a common good that could be gained by all, and the landing of the United States on the moon accelerated the concerns of those States worried about being left behind.22 It is these five treaties that are the most influential on any endeavor or consideration of space flight, investment, or related tasks. There are five declarations and legal principles that are more specific: 1, the Declaration of Legal Principles;2324 2, the Broadcasting Principles;25 3, the Remote Sensing Principles;26 4, the Nuclear Power Sources Principles; and 5, the Benefits Declaration.27 While these are important to the implementation of the States in cooperating or limiting certain aspects (such as requiring cooperation or limiting the use of nuclear material) they have little effect for the consideration of an investor. III. History of Liability in Space Law Article VI of The Outer Space Treaty states, State Parties to the Treaty shall bear international responsibility for national activities in outer space, including the Moon and other celestial bodies, whether such activities are carried on by governmental agencies or by nongovernmental entities, and for assuring that national activities are carried out in conformity with the provisions set forth in the present Treaty. The activities of non-governmental entities in outer space, including the moon and other celestial bodies, shall require authorization and continuing supervision by the appropriate State Party to the Treaty. When activities are carried on in outer space, including the Moon and other celestial bodies, by an international organization and by the State Parties to the Treaty participating in such organization. Article VII states, Each State Party to the Treaty that launches or procures the launching of an object into outer space, including the Moon and other celestial bodies, and each State Party from whose territory or facility an object is launched, is internationally liable for damage to another State Party to the Treaty or to its natural or juridical persons by such object or its component parts on the Earth, in air space or in outer space, including the Moon and other celestial bodies. These two articles are the foundation of what would eventually be the Liability Convention, in that it describes early what States should expect and have agreed on regarding the liability they would face and would face on behalf of their private citizens and corporations. The Liability Convention looked to expand on Articles VI and VII of the Outer Space Treaty. Article I defines, “Launching State” as either; “(i) A State which launches or procures the launching of a space object;” or “(ii) A State from whose territory or facility a space object is launched.” The insertion of “or” in both clauses leaves four entities the ability to be called the, “launching State:"

1, A State which launches a space object; 2, A State which procures the launching of a space object; 3, A State from whose territory a space object is launched; 4, A State from whose facility a space object is launched.

In Article II it also reiterates that “A launching State shall be absolutely liable to pay compensation for damage caused by its space object on the surface of the earth or to aircraft in flight.”

In Article III, States are at fault for damages and injuries other than on the surface of the Earth only when “the damage is due to its fault or the fault of persons for whom it is responsible.”

Article IV covers that two or more parties are jointly and severally liable if a third party State is injured by the two or more parties.

Article V states that when “two or more States jointly launch a space object, they shall be jointly and severally liable,” for damages; launching States can indemnify or apportion amongst themselves any financial obligation, and that the State from whose territory the object was launched is a participant.

The articles of The Liability Convention continue to list situations that vary slightly before going into the administration of how The Liability Convention should deal with situations arising under this. On September 5, 1962, an object landed in Wisconsin. This was debris from Sputnik IV, according to the calculations of the Smithsonian.33 This was before The Liability Convention, but no damage was caused. On January 24, 1978, the treaty was tested for the first time.

The U.S.S.R. had launched a satellite, Kosmos 954, that within months of launch, had an erratic and decaying orbit. 35 Kosmos 954 broke in re-entry and scattered debris in portions of Canada.36 The Satellite had a radioactive power source and clean up was extensive, costing roughly sixteen million Canadian dollars.37 The U.S.S.R. paid Canada three million Canadian dollars to settle all matters and Canada accepted despite having originally sought just over six million Canadian dollars.

The settlement between the two nations followed the Liability Convention, though the parties had expressed different expectations under that convention. Duties from the five space treaties regarding space objects returning to earth were expressed as 1, duty to forewarn; 2, the duty to provide information; 3, the duty to clean up; and 4, the duty to compensate for injury. This is the only case of the Liability Convention being applied. The next closest incident of a space object falling to the ground and a State being held liable is when Skylab fell across a portion of Australia.Australia charged NASA with a littering fee, which was covered as a public relations stunt by a radio station.

As the Liability Convention is still binding almost 50 years later, it is important to consider where a corporation looking to enter the space market exists in the current legal framework. Regardless of which State a corporation is in, when it is planning to launch it is bound to follow its State’s domestic laws. Once it has done that, it is required to register with the State in some form, due to the State having to register the launch with the Secretary-General of the UN under the Registration Convention. A private corporation launching a space object necessarily creates a launching State in one of four ways according to the Liability Convention as discussed above:

1, the State which launches the object; ,

the State which procures its launching;

3, the State from whose territory it is launched; and

4, the State from whose facility it is launched.

So, if the private corporation has a hand in the launching, the State which is the home of the private corporation is now a launching state. The problem arises when, like the current state of the economy, it is a globalized affair where goods travel abroad quite often, and without there always being control from the home State. If, hypothetically, S.E.S. S.A. (A Luxembourgish Corporation) procured through a contract for Airbus (A Netherland company) to launch a satellite from a facility in Japan that is owned by SpaceX (a U. S. Corporation), and then the launching catastrophically fails and damages property in Russia, is Russia able to sue all four States and the corporations involved? Additionally, if a wiring harness that had been manufactured in Mexico and a switchboard manufactured in China was the cause of the failure, are those States and whichever corporations made those items now also jointly and severally liable for the entirety of the damages? How would this issue be resolved under the current Liability Convention is best illustrated by one of the few examples of lives lost due to equipment failure: The Challenger Disaster. On January 28, 1986, the Challenger Space Shuttle launched and 73 seconds after takeoff was destroyed in an explosion that broke the vehicle into pieces that rained debris into the Atlantic for more than an hour.

The cause of this issue was an O-ring that failed to perform under the temperature and pressure changes, resulting in loss of control, loss of cabin pressure, and eventual loss of integrity in the vehicle leading to the death of everyone on board.44,45 Those left behind, four spouses and six children, were able to sue both the United States government and Morton Thiokol, the manufacturer of the rocket that failed.

The entirety of this case took place in the United States’ domestic law, but this case is one of the few examples of how liability would work for space ventures, and the concept is not drastically different from how liability would work in any other venture: an aggrieved party can sue the entity whose actions or inactions lead to the damages being caused and possibly the State in which that entity resides due to various reasons.

There are exceptions to liability. Under the treaty, and domestic law discussed below, States can indemnify the possible damages caused by private organizations, or from other launching States. Additionally, the International Space Station Inter-Governmental Agreement (IGA) sets up a regime that allow multiple States to use the ISS in a somewhat independent nature which will be discussed below.

The IGA issues a cross-waiver of liability for many cases, with the exception to that being a signatory State to one of its citizens, when there is willful misconduct, injury or death, or intellectual property claims NASA has five bilateral agreements, one with each of its counterparts in Europe, Canada, Russia, and Japan, detailing the two parties views of the different portions of the IGA.51 V. How Liability Threatens Sovereignty and Profit As explained above, there are two types of entities that would be held liable when events go awry: the State and the Private Corporation. The issue in balancing the needs of these two parties is that the State’s goals are varied; from the welfare of the citizenry to the political posturing on the international stage. This is in direct conflict with the goals of a private corporation whose primary, and often sole, goal is to make a profit. In his paper, Hurwitz discusses that the privatization of space involves two related liability questions: product liability (such as the events of the Challenger Disaster), and general liability where it is impossible to identify the cause.

The prior is clearer, and the latter results in the, or every, launching State being jointly and severally liable. With that in mind, should and do States allow investment into the space industry?54 A. Why States would implement regulations regarding space investment, regarding liability and security? According to the Registration Agreement, signatory members must maintain and give a list to the United Nations Secretary-General regarding all launches in which it is a launching State. If there is more than one launching State, only one is required to notify the United Nations Secretary-General.

Yet, even if one State is contractually obligated to be the notifying member, the other launching States are still liable. There is no notification requirement based on the Registration Agreement or anything else previously discussed that, hypothetically, General Electric must notify the United States if it makes a material investment in an organization or State that uses its components in the launching of a space object. In this scenario, the United States is possibly liable for damages that may result under a product liability or a general liability regime.

Should States limit the amount or number of foreign investments their private citizens and corporations partake in to better protect their liability? There is another reason States may want to limit the ability of their citizenry to invest in other State’s space programs: National Security.

States may develop different systems to prohibit the export of the items, knowledge, and technology that could be used to allow foreign States and actors to produce their own weapons, such as Inter-Continental Ballistic Missiles (ICBMs) or other similar weapons that are a direct threat to the citizenry and defenses of States. Domestic investment from domestic sources or from the State may lead to the creation of many things that the State may then restrict the alienation of to ensure other States or actors are not able to use these creations for ill deeds, domestically or abroad.

B. How do States currently regulate space investments? The State, in the task of looking out for its citizenry, can only make laws and regulations that apply to its citizenry or to actions that take place within its borders.This is important, because hypothetically, while the United States may not want a citizen of theirs investing abroad, they may not be able to stop it. When domestic, private individuals want to invest abroad, the field of space corporations is quite small. Of the 193 members of the United Nations, roughly sixteen organizations have achieved launches of space objects from their territories.

That being the case, the amount of variance and information needed to decide where to invest is not so large as to be burdensome. For Russia, Federal Law states, With a view to ensuring Russian national defense and state security, the Federal Law establishes statutory restrictions for foreign investors and groups of persons that include a foreign investor (further on referred to as a group of persons), which have interest in the equity of the business entities of strategic importance for national defense and state security, and (or) consummate transactions to gain majority interest in the equity of the above economic entities.

Article 1 establishes the goal of the law and is similar to other laws that will be discussed only in comparison below. Article 3 goes over the basic concepts in three sections. Section 1 states that a combination of factors and conditions regarding vitally important interest of society will be used to determine if foreign investment could be a threat to national defense and state security, where also Article 6 supports this concept with a list of forty-two “Business activities of strategic importance for the national defense and state security.”61 The entirety of the Law aims to place the Russian government in a position to preemptively have the final call on whether or not foreign investment can enter into a particular field, and whether or not foreign interests can take control of an industry or entity within those particular fields.

The Law states that all applications would go to an authorized body, which can be the Ministry of Defense, the Federal Security Services, or the Inter-Administration Commission for the Protection of State Secrets.

Canada has a similar regulatory scheme.

Under two acts, the Minister of Industry and the Minister of Innovation, Science and Economic Development are to be notified of any investment that places a non-Canadian, directly or indirectly, in control of less than fifty percent control of an entity that is of national concern.65 If the amount to be acquired by a non-Canadian is equal to or greater than fifty percent, then a review will be conducted by a Minister. Alternatively, a review will be conducted if the investment is possibly injurious to national security. The same kind of system can be found to exist for France, Japan, China, India, end even South Korea.

The ability and need for States to control the inflow of investments, in the form of capital or otherwise, is nothing new; the States regulations cited above come from a stretch of years as far back as 1949. This is not a new role for the State, and instead of determining new rules, roles, and requirements as space becomes a private field, States have just adapted their current and previous regulations to envelope new industries. In the United States, the Arms Export Control Act, the Export Administration Regulations (EAR), the United States Munitions List,75 and the International Traffic in Arms Regulations (ITAR) provide a system of regulations that the United States follows in determining whether investment abroad is against the national security of the United States. The Arms Export Control Act allows export of goods to, “friendly countries having sufficient wealth to maintain and equip their own military forces at adequate strength . . .” phrased in such a manner as to be broad to allow the executive and legislative branches to work with exports as they see fit. The EAR covers any item that, “has civil applications as well as terrorism and military or weapons of mass destruction (WMD)-related applications . . .” Luckily for the unaware, EAR § 730.8, titled “How to proceed and where to get help,” explains how to navigate through the EAR with subsections titled appropriately, “How do you go about determining your obligations under the EAR?”78 The United States Munitions List specifically enumerates, in Category IV, “Launch Vehicles, Guided Missiles, Ballistic Missiles . . .” continuing with “. . . space launch vehicles . . .”79 Lastly, ITAR, which the United States Munitions List falls under, is the epitome of American law: eleven parts cover everything from the definitions, other acts, and laws that are intertwined with the ITAR, and even sections that enumerate how individual deals with certain countries are different or how prior agreements are controlling.80 Traditionally, the States discussed above have been the capital-exporting States, the home States of investors who took their capital and made investments in States where resources, labor, or regulations were less prohibitive and the situations more profitable.

With the States partaking in the Space industry being of such a small number, and the traditional home of capital, this relationship has changed. This means that the United States is an equally viable host State for investments in the space industry. How do States make themselves viable and desirable locations for foreign investments? We have two examples to look at currently: the United States and Luxembourg.

For foreign investment coming into the United States, there is the Exon-Florio National Security Test for Foreign Investment (Exon-Florio Test) and the Foreign Investment and National Security Act of 2007.

The Exon-Florio Test allows the President of the United States to step into proposed domestic acquisition by foreign investments and block the transaction if it may threaten or impair the national security.

Additionally, the Foreign Investment and National Security Act of 2007 clarifies terms like, “Critical Infrastructure,” “Critical Technologies,” and “National Security.” While these are in line with the legislation and laws laid out above, the United States has also enacted the “United States Commercial Space Launch Competitiveness Act” of 2015, also called the “Spurring Private Aerospace Competitiveness and Entrepreneurship Act” (SPACE Act). This act was made to ensure that the United States stayed competitive in private investments for the space industry. This act empowers NASA and various agencies, such as the Department of Transportation, to create reports and address how to best move forward regarding liability, insurance, traffic management.

The act also restates the Office of Space Commercialization as the Office of Space Commerce, whose function is

(1) To foster the conditions for the economic growth and technological advancement of the United States space commerce industry;

(2) To coordinate space commerce policy issues and actions with the Department of Commerce;

(3) To represent the Department of Commerce in the development of United States policies and in negotiations with foreign countries to promote United States space commerce;

(4) To promote the advancement of United States geospatial technologies related to space commerce, in cooperation with relevant interagency working groups; and

(5) To provide support to federal government organizations working on Space-Based Positioning Navigation, and Timing Policy, including the National Coordination Office for Space-Based Position, Navigation, and Timing

Lastly, the act also puts into force the Space Resource Exploration and Utilization Act of 2015.85 In it, the President through the various federal agencies, aim to, “facilitate commercial exploration for and commercial recovery of space resources by United States citizens,” while discouraging government barriers, and promoting engagement in, “commercial exploration for and commercial recovery of space resources free from harmful interference.”

In 51 U.S.C. 50914 and 50915, the Act changed the amount of liability insurance and financial responsibility requirements of private corporations launching space objects as determined by the Secretary of Transportation and an amount of liability the United States government was able and willing to take for liability claims by third parties against the United States’ private corporations, also determined by the Secretary of Transportation, respectively.87 Lastly, in 51 U.S.C. prec. 51303, sec. 403, “[i]t is the sense of Congress that by the enactment of this Act, the United States does not thereby assert sovereignty or sovereign or exclusive rights or jurisdiction over, or the ownership of, any celestial body.” This is to hope that what this Act pushes for still conforms with the original space treaties. The United States, through NASA and the IGA, have started to leverage their position on the ISS to open up a new “Low Earth Orbit Economy.”

NASA is hoping to open up the United States owned modules, flights, and supplies to third parties. This will allow private entities to test new theories without needing to finance an entire launch by themselves. Additionally, Luxembourg, a Grand Duchy situated in the middle of Europe, has historically also been situated in the middle of the history of private space endeavors.

The Parliament decided in June of 2015 to set out a plan for the government to back the development of a future in space mining.

An advisory board was set up in October 2016 with the “main mission of advising the government on the use of space resources.”

This was, and has been, continued with an advisory board consisting of a representative from the Ministry of Economy, Justice, Finance, Foreign and European Affairs, Higher Education, and Media and Communications, whose goal is, “to advise the government on the creation of a Luxembourg ecosystem conducive to the development of economic activities related to the peaceful use of space resources.”92 The Luxembourg Space Agency also has programs for entrepreneurs and foreign startups to help entice foreign investment to them. Additionally, countries like the United Arab Emirates have started the process of writing their own laws, specifying their stance on the future of space mining.93 This brings the total number of States with laws regarding space resources and seeking investment from abroad to three.94 Up to this point, we have covered the history of space law at the international stage, the position many States have taken to import and export space industries, both for national security and liability reasons, and what some States have done to try to attract foreign investment.

VI. Possible futures

Above I asserted a hypothetical situation that resulted in four launching States being held liable due to three private corporations wanting to launch a satellite. “If, hypothetically, S.E.S. S.A. (A Luxembourgish Corporation) procured through a contract for Airbus (A Netherland company) to launch a satellite from a facility in Japan that is owned by SpaceX (a U. S. Corporation), and then the launching catastrophically fails and damages property in Russia. . .” where would the current regime tell the Russian citizen, or Russia as a State, to go to seek reimbursement for damage? Are there different procedures for the State or their citizen to press claims? To discuss where the regime is currently, we will need to discuss the Liability Convention in theory, in practice, and possibly better options. The only options available now are to address the problems at the State level or the international level. A. States shoulder all of the liability Under the current regime, States that are launching States are responsible for damages and injuries that result to other States. This means that in the above hypothetical, there are two routes that can be taken: first, Russia could seek compensation for damages under the Liability Convention; or second, Russia or the Russian citizen(s) could seek damages in the domestic court of one of the launching States. However, under the Liability Convention, only one method of compensation shall be sought.

1. Nothing changes and the current regime remains inefficient If under the first option, Russia seeks compensation under the Liability Convention, the only reference we have is the Kosmos-954 incident discussed above. Russia would then take the launching States to a court in any of the five States involved. Depending on the launching States law and the procedural law of the State in which the case is filed, the launching States will all be named parties to the suit, and they may choose to either defend themselves, enjoin the private corporations that made the States responsible for the damages, or seek to privately settle so that the launching States can adequately assign the costs of liability to the proper party.

If they privately indemnify through agreements or bilateral investment treaties, such as the IGA, it may streamline the process if the fault is known and one State accepts full liability, but the indemnity clause of the IGA only indemnifies the launching States of the ISS against claims from each other, not from third parties that were damaged.

This is inefficient because, in the hypothetical, none of the States had a hand in the launching but are made responsible under the Registration Agreement and the Liability Convention. The States are required to mount a legal defense for a suit they are not only not personally at fault for which may lead to the best defense not being mounted, or this may also lead to a subsequent suit having to be filed domestically to ensure the State is compensated for the damages they have paid. There is a benefit to the current system. Under the Calvo doctrine, a wronged investor had no diplomatic backing and was forced to seek compensation for damages to investment from a host State using the host state’s domestic courts with no right for diplomatic protection. States may be politically required to press their citizens’ claims in foreign domestic, or international courts.

2. States use international law and domestic law/regulations to better position themselves As previously discussed, the United States has the SPACE Act, with a subsection that requires the private corporation to acquire insurance for such situations that may arise.

One of the other portions of this act also made the United States liable for damages that may result above and beyond what the insurance may have covered in certain situations.The United Kingdom has taken a different approach. Under the Outer Space Act 1986, “A person to whom this Act applies shall indemnify Her Majesty’s government in the United Kingdom against any claim brought against the government in respect of damage or loss arising out of activities carried on by him to which this Act applies.”

Sweden has a similar clause. Neither of these clauses has been tested under the Liability Convention, but the question remains if they are allowed to shirk treaty obligations, if this simply means that the private corporations would have to mount the defense, or whether the private corporations would have to settle for the outcome of a case they had no hand in. This leads to a situation wherein judicial efficiency is thrown to the side due to treaties that are roughly 50 years old. A broad interpretation of the Liability Convention does have two benefits; 1, the more States that bear liability the more likely it is that damages can be paid; and 2, States like the United Kingdom, Sweden, and the United States can individually handle their liability in various ways, where the experimental nature of State’s treatment of the issue may find an ideal way to settle this conundrum. With the above hypothetical, if Russia or Russia’s damaged citizen pressed a claim in a domestic court in the United States SpaceX may have the United States Government, the Insurance Provider, and SpaceX’s own counsel to represent their interests, and the same would be said of Japan, the Netherlands, and Luxembourg depending on how each of those States have their own laws and regulations regarding private space corporations.

If the laws from the United Kingdom or Sweden were in play, the additional legal hurdle arises due to, if the claim is pressed in domestic court, are they treaty-bound to oblige despite domestic law? According to the Responsibility of States for Internationally Wrongful Acts, “The responsible State may not rely on the provisions of its internal law as justification for failure to comply with its obligations under this part.”

Thus being the case, if a private corporation in the United Kingdom provided sensors to the space object in our hypothetical, and a suit was held in the domestic courts of the United States, the United Kingdom law would be ill-suited to assert as a defense by Her Majesty’s government, as treaty law binds the United Kingdom as a liable party. Where the law would be useful, is if the Russian government or its citizen asserted a claim in the courts of the United Kingdom.

At which point, the United Kingdom could assert its claim that the private company indemnified the United Kingdom against any liability that may result. On a spectrum, the three ways States have situated themselves regarding private space endeavors have been:

1, the United Kingdom indemnifying itself against any loss and pushing all of the responsibility on the corporation;

2, various States creating a legal framework which allows private corporations to work towards space endeavors; and

3, the United States framework where the regime allows private corporations to work towards space endeavors, but the United States also shouldering the burden of responsibility to some extent. While the United Kingdom’s stance is of the utmost protection to the citizenry in that, because the United Kingdom has taken a standoffish position, the citizenry, through the government, won’t be held liable as a launching State (at least in their domestic courts.) On the other end of the spectrum, the United States has decided to lay out a framework, that if followed, means that the United States shoulders the responsibility, which means that investors are more willing to take risks because it is shared. B. Private corporations are somehow recognized as treaty-bound. A step that could be accomplished at various levels is to somehow recognize the private corporation’s involvement in the space industry. As discussed above, the domestic laws can be changed, but the jurisfaction versus jurisaction distinction and recognition means that even if, hypothetically, the United States changes what it’s citizens or private corporations can legally do abroad in order to limit the United States’ liability (the jursifaction), the inability to enforce that law abroad is an issue that may make the law useless (the jurisaction).

1. Re-define launching state In a paper from 1994, William Wirin asserts that, the term ‘launching State’ in a ‘procure’ situation should not be applied unless there is direct control over the launch. Of course ‘launching State’ would include launches from territory/facility and instances when a second State directly manages a launch and the State whose territory is being used is merely an accommodating party.

Additionally, I would include in the definition of ‘launching State’, a State/private entity who purchases a launch service but does not control or manage the actual launch, because they will control the payload on orbit which has the potential to cause damage.

Mr. Wirin’s paper ends with “Accordingly to convince the entrepreneur to invest in space there needs to be a legal infrastructure which instills confidence and reduces political and regulatory risk to a minimum.”

The definition of “launching State” could be changed to limit liability to only those States who have direct control in some aspect of the launch or the parties launching, though this raises the risk of every relevant State claiming not to be the launching State.

This should be done for practicality purposes, as launching from the equator is more efficient for fuel purposes. Currently, there is no benefit for equatorial States to welcome foreign investment or launches, which would greatly benefit the investor but would open up the equatorial State to liability if anything went wrong during the launch.

While the concern is different, space flight currently, for jurisdictional purposes, heavily reflects maritime law. Space objects are considered “objects of international law,” wherein they fly under a flag and maintain a kind of “quasi-jurisdiction,” much like any vessel on territorium extra commercium.

Though, the territory space objects use is “territory not susceptible of appropriation,” as the open seas, it is now a legally distinct territory known as, “the common heritage of mankind.”

This is why, though SpaceX may launch from platforms in international waters, the United States is still the launching State due to the space objects being quasi-jurisdictional; as long as SpaceX is a United States corporation, the vessels will fly a United States flag. 2. Re-write international law A more drastic measure would be to write a new, or rewrite the current, Liability Convention. The Liability Convention is, as the time of writing this, 47 years old, was written during the Cold War, and before private space flight was widely considered. As such, the writing and scope of the convention are aimed at State actors. A rewriting of the convention could lead to private corporations being recognized for the responsibility they bear. Any individual who travels to space is a citizen of their State and shall be regarded as, “the envoys of mankind.”

This means that the private citizen launched by a private corporation is already recognized by the treaty, and clarity of the private corporation’s position, recognized by international law, would streamline the investment process, requirements, and responsibility that could result. It is the clearing away of these unresolved issues that would lead to more investments, both domestically and across borders, that could open the next step of human exploration. The clearest benefit of allowing private corporations to be recognized as subjects of international law, and not objects, would allow some kind of recognition in front of the International Court of Justice. Though the recognition of private corporations as having legal personality, even quasi-legal personality, raises substantial issues, one of the things that would be solved would be the ability to bring claims by an aggrieved State against SpaceX or other private space corporation would remove issues of neutrality that States may feel if they were to bring a claim against a private corporation in the corporation’s home State. The issue arises in that, private corporations have none of the descriptors ascribed to States: “(a) a permanent population; (b) a defined territory; (c) government; and (d) capacity to enter into relations with the other states.”

An intermediary option presented by Van C. Ernest in “Third Party Liability of the Private Space Industry: To Pay What No One Has Paid Before,” is to implement an independent international tribunal whose sole purpose is to deal with space-related accidents.112 Ernest’s plan would create something similar to the European Court of Human Rights where cases can be brought by States, individuals, groups, or nongovernmental organizations.113 His option would also eliminate risks against the neutrality of decisions, increase predictability of awards, though it also raises its own issues.


The history of space law is varied but focused mostly on the State as the actor bound by Treaty. In the almost 50 years since the Liability Convention was enacted, the private actor has taken the center stage in space exploration and exploitation. A few States, namely the United States, the Grand Duchy of Luxembourg, and shortly the United Arab Emirates, have taken the steps to allow investors, domestic and foreign, to reap the benefits of the future of space as an industry.

With the usual relationship between what had traditionally been home and host nations changing to where the traditional home nations are now the hosts for space innovation and investment, international and domestic law have yet to appropriately react. The States have taken differing stances on what to do about private space corporations, with some helping and some allowing them to take on as much risk as they are willing to without any sanctioned help.

The options presented in this paper are only surface-level responses, and while the privatization of space endeavors has already mounted to many companies jumping into existence, the clarification of the private corporation and their international responsibility would allow a streamlined, and profitable, market for investors.

Fluctuations in the market should be the result of market forces, and not the uncertainty that regulation can bring. One is able to ponder about the future of space privatization and with some grounding in reality, still have an eye on the ideal. Since the Outer Space Treaty laid out that any individual that reaches space is an “envoy of all mankind,” and that space and celestial bodies are the “common heritage of all mankind,” States have, perhaps more in the field of space as compared to any other field, worked with an immeasurable amount of good intentions.

The Rescue Agreement and the Registration Agreement, which dictate that signatories take all available steps in order to help those in need and return any individual or property back to the State in which it belongs. It is with this in mind that, though nothing presented here is a drastic change, though some change needs to be done in order to bring in more investment, it is knowing that to some extent, the States of the world can and should move towards a more clear regime of law, both internationally and domestically, to pave the way for the first of what could be many trillion-dollar enterprises. In the words of the first Chairman of the Committee on the Peaceful Use of Outer Space, “[t]he choice to be made by man was clear, and in that choice the law-maker and the lawyer could not remain neutral.”

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